Gas-fired power plants are all-rounders. They can go from a complete standstill to maximum output in just a few minutes and can also be operated very flexibly. Thus they have what it takes to keep power grids stable in the age of renewable energy sources. Gas-fired plants also emit a lot less carbon dioxide than coal power stations. With all of these advantages, it appears that good times are ahead for natural gas.
Three months after the accident at the Fukushima Daiichi nuclear power plant in Japan, the International Energy Agency (IEA) was predicting that the golden age of natural gas was about to begin. In 2035, according to the IEA, natural gas will account for 25 percent of the global energy supply; the current figure is 20 percent. In fact, some experts are predicting that gas might surpass coal as early as 2030, while the share of nuclear power is expected to decline.
Such a scenario would be a good thing for the global climate. That’s because gas-fired power plants produce much lower carbon dioxide emissions than facilities that burn coal, which is currently the most widely used raw material for electricity production. Today’s state-of-the-art combined cycle power plants release only around 330 grams of CO2 per kilowatt-hour of energy. Even the best coal-fired plants at the moment produce more than twice that amount. Siemens would also benefit from a new gas boom. The company offers technical solutions for everything from gas extraction to the construction of entire power plants.
How likely is a scenario such as the one described above? “All indications point to natural gas playing a more important role in the energy mix of the future,” says Volkmar Pflug, Chief Market Analyst at Siemens’ Energy Sector. Pflug’s belief is based on scenarios of the future energy mix that Siemens develops annually with customers in 55 countries. The studies take into account the conditions in individual countries, because energy suppliers in different regions decide to build combined cycle plants for different reasons.
In regions where the share of renewable energy sources is high, suppliers are attracted by the great flexibility of gas power plants, whose output can be stepped up very quickly when there’s not enough sunshine or wind. The Irsching 4 power plant unit, for instance, which was built by Siemens, can increase its output by 35 megawatts (MW) in just one minute. Although modern coal-fired plants can also change their output this quickly, they can only do so if they’re already up and running, and it can take hours to warm them up. The gas plant in Irsching, Germany, on the other hand, can produce 350 MW of power just ten minutes after a six to eight-hour pause. This is achieved by initially decoupling a slower steam turbine and operating the gas turbine alone. As soon as enough heat is generated, the plant is switched to combined cycle mode.
Security of supply is the main consideration in the U.S. and booming Asian nations, such as India and Vietnam. These countries don’t want to rely on one source of energy, even though coal is still generally a cheaper option than gas is today.
South Korea offers another example. The country has very few energy reserves and is the world’s second-biggest importer of liquefied natural gas (LNG). The South Koreans want to use all that imported gas as efficiently as possible. To this end, the country’s first H-class combined cycle power plant will enter service in the summer of 2013. The facility will feature an H-class turbine — the same type of turbine that makes possible a world efficiency record of 60.75 percent, which has been set in Irsching. Siemens has already sold seven of these gas turbines to South Korean companies.
Unconventional Sources. The tremendous boom in demand for gas power plants in the U.S. is due mainly to low gas prices. Natural gas in the U.S. is increasingly being obtained from so-called unconventional sources — methane deposits that formed from decayed organic material trapped in fine-grained layers of sedimentary rock and coal seams rather than in large hollow chambers, which is usually the case with natural gas. Until recently, extracting gas from such sources was too expensive and therefore not worth the effort. But technological advances have now made extraction profitable. For one thing, directional drilling now makes it possible to bore horizontally to a depth of as much as one kilometer below ground, into what are often thin rock layers of only several meters. Gas can also be forced out of rock pores by pumping water at a pressure of up to 1,000 bars in a process known as fracking.
To date, some 100,000 shale gas bores have been drilled in the U.S. — with the result that it has now become more financially attractive to invest in gas-fired plants than in coal power generation facilities. This drilling boom will eventually reach the rest of the world. The IEA expects to see up to a million bores by 2035 because nearly every country has unconventional gas deposits on its territory. Such drilling is controversial, however. Among other things, environmentalists are worried that the chemicals used in fracking can contaminate groundwater. Fracking experts counter by pointing out that bore shafts are lined with cement, which ensures that no contaminants can get into the perpendicular layers where groundwater flows.
“The success that combined cycle power plants will ultimately enjoy also depends heavily on political factors,” Pflug explains. Germany, for example, wants to build new gas-fired plants to compensate for supply gaps that occur when an insufficient amount of energy is produced at solar and wind facilities. As part of the country’s energy transition policy, Germany plans to increase the share of renewables in its energy mix to around 50 percent by 2035 — and to 80 percent by 2050. At that point, gas power plants might in some cases operate at full capacity for only 1,500 to 2,000 hours per year. By comparison, such plants are usually run at medium capacity today, which corresponds to between 4,000 and 5,000 hours of full capacity operation per year. To ensure that investments in gas-fired plants nevertheless pay off, a new market concept must be developed — one that assigns the operating costs for such plants on an ad hoc basis to the entities that require their services. In other words, in order to ensure a stable supply of electricity, these additional costs for electricity required by the use of fluctuating renewable sources must be borne by those producers that generate power from fluctuating sources.
In any case, the power plants used in future energy systems will have to be extremely flexible. Energy supplier E.on is now retooling its combined cycle plants in the UK to allow them to operate even without a steam generation process after a cold start — a technical feat that state-of-the-art combined cycle plants from Siemens can already achieve. Politics plays a major role in decisions regarding the kinds of power plants to be built in the U.S. as well. Officials in the U.S., for example, are considering an upper limit of 450 grams of CO2 emissions per kWh of electricity produced.
Coal-fired plants can only comply with this restriction if they are equipped with CO2 separation and storage systems. The associated technologies are also being tested by Siemens, even though their use reduces a plant’s efficiency and thus its profitability as well. Experts also suspect that these technologies will limit the ability of coal-fired plants to rapidly alter their output. Combined cycle plants, on the other hand, can easily meet such an emission limit (or produce fewer emissions) even without CO2 separation.
Exploiting Heat. The efficiency of combined cycle plants can be further increased by using heat from a plant’s combustion process to supply homes, apartments, and industrial facilities with heat. Such a measure raises a plant’s overall energy efficiency rating to more than 80 percent. This approach can ensure a reliable supply of energy — and lower CO2 emissions — over the next few decades, as it will take some time before renewable energy sources can completely replace fossil fuels. With this in mind, the European Parliament called on EU member states back in 2004 to present individual plans for expanding their use of cogeneration (combined heat and power — CHP) facilities. Germany subsequently announced a plan to double the share of energy generated at its CHP plants to 25 percent by 2020 — a very ambitious goal, given that effective heat exploitation requires a plant to be situated as close as possible to energy consumers, i.e. to cities.
Nonetheless, a new project in Düsseldorf shows that such an approach can in fact be implemented. In July 2012 Siemens announced that it had been awarded a contract for the turnkey construction of a new combined cycle plant to be known as “Lausward F.” When the new plant in the port of Düsseldorf goes on line, it will immediately set new world records in three categories. First, it will have an electrical output of 595 MW, the highest ever for a single combined cycle unit. Secondly, its electrical efficiency rating will reach more than 61 percent, while the overall capacity factor for natural gas as a fuel will total roughly 85 percent. Finally, the facility will decouple an unprecedented 300 MW of district heating capacity from a single combined cycle unit for use in a cogeneration system.
The increase in electrical output and the efficiency gain from over 60 percent in Irsching to more than 61 percent in Düsseldorf might not seem like much at first. “However, you also have to consider that fuel accounts for 75 percent of a plant operator’s total costs,” says Lothar Balling, who is responsible at Siemens for sales of combined cycle plants in Central Europe and Asia. A mere 0.25 percent increase in electrical efficiency can increase electricity production by around 15 million kilowatt-hours each year — with both fuel costs and CO2 emissions remaining unchanged.
Regardless of where and for what purpose new combined cycle plants are built, Siemens is likely to benefit. The company has consistently developed its gas turbine manufacturing network into a global operation over the past few years. Siemens also recently invested more than $350 million in its plant in Charlotte, North Carolina. The investment added 700 new jobs to the existing workforce of 1,400. And plans call for the Charlotte facility to manufacture components for export.
Siemens is now also planning a new production center for gas turbines in Saudi Arabia in order to serve that country’s market, and at the end of 2011 the company signed a contract to create a joint venture that will begin manufacturing gas turbines in St. Petersburg, Russia, in 2014. All of these developments add up to good prospects for a new golden age for gas.